Cheaper car insurance is now a possibility for motorists in the UK thanks to new rules that will reduce costs to insurers, according to Secretary of Justice Ken Clarke.
With regulatory effort going into kerbing the depredations of ‘ambulance chasing’ lawyers who rely on conditional fee arrangements, Mr Clarke feels that it will no longer be so difficult to find discount car insurance in the UK. The new rules will work to keep costs down for car insurance companies by barring lawyers from collecting their success fees from the defendant but instead be taken from the winning claimant’s damages claim.
The Association for British Insurers states that more than £40 of each motor car insurance premium in the UK goes towards paying court costs for car insurance claims. The new legal arrangement could result in the reduction of this extra charge, leading to cheaper car insurance rates for all motorists in the UK.
ABI representative Nick Starling laid the blame firmly on lawyers for encouraging a so-called ‘compensation culture’ by encouraging sometimes frivolous car insurance claims. The results of their actions has led to genuine claimants experiencing a slower and less-efficient process and also leads to exorbitant legal costs that lead to premium increases for all consumers.
Mr Starling continued, stating that the government has properly addressed the injustices in the legal justice system by fully implementing the recommendations made by the civil litigation review conducted by Lord Justice Jackson. Drivers can therefore look forward to less expensive rates in the not-so-distant future as a result of the goverment’s actions, he added.
The costs of insuring a vehicle in the UK rose by approximately 33 per cent last year, according to the AA. The motoring organisation also predicts that 2011 will see a further 20 per cent increase as well.